Citation: 2007TCC432
Date: 20070724
Docket: 2006-1524(CPP)
BETWEEN:
4528957 MANITOBA LTD.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
[OFFICIAL ENGLISH
TRANSLATION]
REASONS FOR ORDER
McArthur J.
Facts
[1] On February 11, 2005, the Minister of
National Revenue (the “Minister”) mailed a reassessment of tax to be paid by
the Appellant under subsection 153(1) of the Income Tax Act (the “Act”)
for the taxation period starting December 31, 2003, and ending September 30,
2004.
[2] On March 22, 2005, the Appellant filed a
notice of objection to this assessment.
[3] On January 16, 2006, the Minister issued a
Notice of Confirmation, which was delivered by mail to 264 Eugenie St.,
Winnipeg, Manitoba, R2H 0Y4.
[4] On April 30, 2006, the Appellant filed with
the Court a Notice of Appeal pursuant to the Informal Procedure. The registry
officer accepted the Notice of Appeal filed on April 30, 2006, because it was
received in the prescribed form.
[5] On July 27, 2006, the Respondent wrote to
the Court to indicate that the Appellant had chosen the Informal Procedure for
questions concerning the Canada Pension Plan (the “Plan”), but that
there was no issue pertaining to that statute. He therefore asked, with the
Appellant’s consent, for an extension of the time limit for replying to the
Notice of Appeal in order to allow the Appellant to take the necessary measures
so that its appeal would be heard under the appropriate procedure, i.e. the
informal procedure, for tax matters.
[6] On August 4, 2006, the Court informed the
Appellant that, if it wished to be heard under the informal procedure for a tax
matter, it would have to advise the Court.
[7] On August 8, 2006, the Appellant wrote to
the Court indicating that it did not agree with counsel for the Respondent that
it was a tax dispute, stating rather that it was a dispute pertaining to a
decision rendered under the Plan.
[8] On August 9, 2006, the Court replied that
no changes would be made to the Appellant’s appeals.
[9] On October 19, 2006, the Respondent sent a
letter to the Appellant, repeating that the appeals filed by the Appellant had
deficiencies and that it had to correct them, failing which, the Respondent
would ask the Court to dismiss these appeals.
[10] On October 27, 2006, the Respondent filed
his notice of motion.
[11] In an undated letter referring to the
Court’s letter of August 4, 2006, the Appellant asked the Court for an
extension of time pursuant to subsection 18.1(1) of the Rules. Schedule 18.1.
was attached to the letter, pursuant to the Rules. The Appellant indicated that
it had always intended to appeal the Minister’s decision.
[12] The date indicated on Schedule 18.1 signed
by the Appellant is November 13, 2006, and it was received by the Court
registry on November 20, 2006.
Reasons for the motion
[13] Counsel for the Respondent submitted
that:
(a)
The Court does not have
jurisdiction on the subject of the appeal;
(b)
An appeal cannot be
made under subsection 28(1) of the Plan because the Minister did not render a
decision under section 27.1 of the Plan.
Provisions
Canada Pension
Plan
Appeal
of assessments
27.1 An
employer who has been assessed under section 22 may appeal to the Minister for
a reconsideration of the assessment, either as to whether an amount should be
assessed as payable or as to the amount assessed, within 90 days after being
notified of the assessment.
Appeal to the Tax Court
of Canada
28. (1) A person
affected by a decision on an appeal to the Minister under section 27 or 27.1,
or the person’s representative, may, within 90 days after the decision is
communicated to the person, or within any longer time that the Tax Court of
Canada on application made to it within 90 days after the expiration of those
90 days allows, appeal from the decision to that Court in accordance with the Tax
Court of Canada Act and the applicable rules of court made thereunder.
Tax Court of
Canada Rules (Informal Procedure)
18.1
(1) An
application for an order extending the time within which an appeal may be
instituted may be in the form set out in Schedule 18.1.
(2) An application
under subsection (1) shall be made by filing with the Registrar, in the same
manner as appeals are filed under.
(3) No application
shall be granted under this section to a person unless:
(a) the
application is made within one year after the expiration of 90 days after the day on
which the notice was mailed to the person informing the person that the
Minister has confirmed the assessment or has reassessed; and;
(b)
the person demonstrates that:
(i) within the 90-day period specified in paragraph (a) the
person
(A) was unable to act
or to instruct another to act in the person's name, or
(B) had a bona fide
intention to appeal,
(ii) given the reasons set out in the application and the
circumstances of the case, it would be just and equitable to grant the
application,
(iii) the application was
made as soon as circumstances permitted it to be made, and
(iv) there are reasonable
grounds for appealing from the assessment.
Income Tax Act
167. (1) Extension of time to appeal -- Where an appeal to the Tax Court of Canada has
not been instituted by a taxpayer under section 169 within the time limited by
that section for doing so, the taxpayer may make an application to the Court
for an order extending the time within which the appeal may be instituted and
the Court may make an order extending the time for appealing and may impose
such terms as it deems just.
(2) Contents of application -- An application made under subsection 167(1)
shall set out the reasons why the appeal was not instituted within the time
limited by section 169 for doing so.
(3) How application made -- An application made under subsection (1) shall
be made by filing in the Registry of the Tax Court of Canada, in accordance
with the provisions of the Tax Court of Canada Act, three copies of the
application accompanied by three copies of the notice of appeal.
(4) Copy to Deputy Attorney General -- The Tax Court of Canada shall send a copy of
each application made under this section to the office of the Deputy Attorney
General of Canada.
(5) When order to be made No order shall be made under this section unless
(a) the application is
made within one year after the expiration of the time limited by section 169
for appealing; and
(b) the taxpayer demonstrates that
(i)
within the time otherwise
limited by section 169 for appealing the taxpayer,
(A) was unable to act or
to instruct another to act in the taxpayer's name, or
(B) had a bona fide
intention to appeal
(ii) given the reasons set out in the application and the
circumstances of the case, it would be just and equitable to grant the
application,,
(iii) the application
was made as soon as circumstances permitted, and
(iv) there are reasonable grounds for the appeal.
169. (1) Where
a taxpayer has served notice of objection to an assessment under section 165,
the taxpayer may appeal to the Tax Court of Canada to have the assessment
vacated or varied after either
(a)
the Minister has confirmed the
assessment or reassessed, or
(b)
90 days have elapsed after service
of the notice of objection and the Minister has not notified the taxpayer that
the Minister has vacated or confirmed the assessment or reassessed
but no appeal under this section may be instituted after
the expiration of 90 days from the day notice has been mailed to the taxpayer
under section 165 that the Minister has confirmed the assessment or reassessed.
Analysis
[14] René Davidson works as a designated
bilingual officer for the Winnipeg Tax Services Office of the Canada Revenue
Agency (the “Agency”). He indicated in his affidavit that he was unable to
confirm that the Appellant had served the Minister with a notice of objection
concerning the assessment under section 27.1 of the Plan or that the Minister
had rendered a decision under section 27.2 of the Plan concerning the
assessment.
[15] The Notice of Confirmation by the Minister
was sent to the Appellant on January 16, 2006.
In the letter reproduced below, John Wiebe confirmed the Minister’s
confirmation:
[TRANSLATION]
. . .
January
16, 2006
Dear
Sir,
Subject: Notice of objection
Evaluation of source
deductions as of November 1, 2004
Please find attached the Notice of
Confirmation by the Minister, which confirms that the evaluation of source
deductions as of November 1, 2004, was duly established in accordance with the Income
Tax Act.
We have not received the required
payroll documents for the periods of 2003 and 2004 as determined on November 1,
2004.
You have not justified
your claims.
If you wish to take other action with regard
to this, you must file an appeal with the Tax Court of Canada. Instructions for
filing an appeal are attached hereto.
[16] Pursuant to subsection 169(1) of the Act,
the Appellant had 90 days after January 16, 2006, to file an appeal with the
Court and, therefore, the last day to do so was April 18, 2006.
[17] The Appellant filed a Notice of Appeal with
the Court registry on April 30, 2006.
[18] The reason why the Court accepted the
filing of the Notice of Appeal after April 18, 2006, is that it was received in
the prescribed form. The registry officer therefore accepted the filing of this
document.
[19] In his letter of July 27, 2006, addressed
to the Court, counsel for the Respondent invited the Appellant to rectify the
defects in its Notice of Appeal. In particular, counsel for the Respondent
consented to the Appellant presenting an application to the Court in the year
following expiry of the time set out in section 169 to file an appeal. The
letter is reproduced below:
[TRANSLATION]
July 27, 2006
. . .
Rather than set aside these appeals, which
have procedural defects, the Respondent asks this Court to grant an extension
of time to file its Reply to Notice of Appeal in order to allow the Appellant
to ask the Court for an amendment to matter 957 so that it can be heard under
the appropriate procedure. The Appellant could then make an application for
extension of time to file these two appeals.
The Respondent will not object to such an
application in the matter 957 since the application will have been filed within
the year following expiry of the time prescribed under section 169 to file an
appeal. However, the Respondent cannot consent to
an application for extension of the time in the Guevara matter since more then
one year has passed since the expiry of this same time limit.
[20] On August 4, 2006, the director of the
Registry Services Division informed the Appellant of the available options to obtain
an extension of the time within which the appeal could be filed under
subsection 18.1(1) of the Tax Court of Canada Rules (Informal Procedure)
(the “Rules”). The letter is reproduced below:
[TRANSLATION]
August 4, 2006
Carlos Guevara
4528957 Manitoba Ltd.
264 Eugenie Street
St-Boniface, Manitoba R2H 0Y4
OBJET: 4528957 Manitoba Ltd.
v. the Minister of National
Revenue
2006-1524(CPP)
Dear Sir:
This letter is concerning the above-mentioned
appeal to the Tax Court of Canada filed on April 30, 2006. In response to the
letter of Mr. Bédard of July 27, 2006 (copy attached), the above-mentioned
appeal should have been filed under the Income Tax Act (Informal
Procedure). If you wish to be heard under the informal procedure, you must notify
the Tax Court of Canada.
The Notice of Confirmation by the Minister
was sent on January 16, 2006, Please note that the taxpayer has 90 days after
the mailing date of the Notice of Confirmation from Revenue Canada to institute
an appeal before the Tax Court of Canada. Therefore, the last day to institute
an appeal before this Court was April 18, 2006. The received date of the appeal
was April 30, 2006.
However, under subsection 18.1(1) of the Tax
Court of Canada Rules (Informal Procedure) it is still possible to apply to
the Court for an extension of the time within which the Notice of Appeal can be
filed. Please find attached, for information, a copy of the Tax Court of
Canada Rules.
Since November 1, 1998, a person wishing to
appeal to the Tax Court of Canada decisions concerning income tax and the GST
under the informal procedure must pay a filing fee of $100.00.
The Court cannot proceed with your appeal as
long as the filing fee has not been received. If you wish to continue with your
appeal, please submit a cheque or money order to the order of the Receiver
General for Canada in the next 30 days.
The Court may waive the filing fee if you so
request in your Notice of Appeal and if the Court is convinced that paying
these fees would cause you serious financial difficulties.
. . .
[21] In this case, the Appellant had until
September 4, 2006, to pay the fee in accordance with the letter sent by the
Court on August 4, 2006.
[22] The Appellant testified that its deposit of
$100 was returned to it in the mail. The Appellant did not explain why the $100
had been returned to it.
Mr. GUEVARA: [TRANSLATION] I had
even deposited the $100 requested for the normal procedure. Unfortunately, the
$100 was returned in the mail.
.
. .
[23] In an undated letter referring to the
Court’s letter of August 4, 2006, the Appellant applied to the Court for an
extension of time under subsection 18.1(1) of the Rules. It attached Schedule
18.1 to the letter pursuant to the Rules and indicated that it had always
intended to appeal the Minister’s decision.
[24] The date indicated on Schedule 18.1 signed
by the Appellant is November 13, 2006, and the Schedule was received by
the Court registry on November 20, 2006.
[25] In my opinion, the Appellant meets the
requirements of subsection 18.1(1) of the Rules because it filed the
application in accordance with the form set out in Schedule 18.1.
[26] The
Appellant also meets the requirements of paragraph 18.1(3)(a). The
mailing date of the Notice of Confirmation was January 16, 2006. The time limit
of 90 days expired on April 16, 2006, and the Appellant filed the application
on November 20, 2006, i.e. within the year following expiry of the 90 days
after the mailing date of the Notice of Confirmation.
[27] In addition, I believe that the Appellant
meets the criteria of provision 18.1(3)(b)(i)(B) because it filed a
Notice of Appeal on April 30, 2006, and confirmed its intention to appeal the
decision in its letter addressed to the Court, as indicated in paragraph 21 of
these Reasons.
[28] Finally, in my opinion, the Appellant meets
the conditions of subparagraphs 18.1(3)(b)(ii) and 18.1(3)(b)(iii).
Subparagraph 18.1(3)(b)(ii) requires that I consider the reasons
indicated in the application and the circumstances of the case. In its letter
of August 8, 2006, the Appellant explained why its Notice of Appeal had been
filed on April 30, 2006. It explained that there had been confusion concerning
the date when the Notice of Confirmation was mailed by the Minister. The
Appellant’s position is that the Notice of Confirmation was filed on February
2, 2006. Therefore, by filing a notice of appeal on April 30, 2006, the
Appellant was on time.
[29] At the hearing, counsel for the Respondent
confirmed that there had been problems with Mr. Guevara receiving the Notice of
Confirmation:
Mr. Bédard: [TRANSLATION] . . .
Mr. Guevara indicated that he had not received it following January 16. So I
checked the files and what happened is that the envelope had the confirmation,
it was sent to Mr. Guevara.
I assume that he was not
at home, so a note was left for him to pick up the envelope at the post office.
The envelope was not picked up and was sent back to the Agency. So, we see the
confirmation that Mr. Guevara provided, with the stamp “February 2, 2006”. And
that was sent by registered mail, I believe. This time, Mr. Guevara
received the confirmation . . .
[30] Thus,
the Appellant also meets the conditions of subparagraph 18.1(3)(b)(iii)
of the Rules. In this case, the Appellant is acting on its own behalf. I will
grant the Appellant the benefit of the doubt because, after the Court contacted
it on August 4, 2006, to explain the options available to it, the Appellant
filed its application on November 20, 2006, in accordance with subsection
18.1(1) of the Rules.
[31] Finally, I am of the opinion that the
appeal filed against the assessment is based on reasonable grounds in
accordance with subparagraph 18.1(3)(b)(iv) of the Rules.
[32] I believe that the Appellant meets the
conditions of subsection 18.1(3) of the Rules and its application is therefore
granted.
[33] Section 169 of the Act provides that an
appeal must be filed within 90 days following the date of the Notice of
Confirmation.
[34] The Notice of
Confirmation for the period at issue in this case was dated January 16, 2006. Therefore, the Appellant should have
filed a Notice of Appeal with the Tax Court of Canada before April 18, 2006.
The Appellant did not meet this deadline. In fact, it did not file the Notice
of Appeal with the Court before April 30, 2006.
[35] Under subsection 167(1) of the Act, the
Appellant could have filed an application for extension of time to institute an
appeal if it had met all the requirements set out in this subsection. The Appellant
had to make its application in the year following expiry of the time limit
prescribed in section 169 of the Act. The Appellant therefore had to file its
application for extension of time with the Tax Court of Canada no later than
April 16, 2007. At the hearing of January 30, 2007, the Appellant had not
presented anything to the Court concerning the requirements set out in section
167 of the Act. Considering that the decision relating to this motion was not
received before June 2007, in my opinion, the Appellant could be penalized if
the motion were allowed under paragraph 167(5)(a) of the Act.
[36] Furthermore, I am of the opinion that the
Appellant could meet the conditions set out under paragraph 167(5)(b) of
the Act.
[37] The motion, accordingly, is dismissed and
the Appellant may make an application to the Court for extension of time in
accordance with subsections 167(1) to 167(4) of the Act.
[38] Counsel for the Respondent has 60 days to
file a Reply to the Notice of Appeal.
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